BRICS bank to defy Western clout in global finances
By Alonso Soto
BRASILIA, July 11 (Reuters) - Leaders of the BRICS emerging market nations meet next week to launch a development bank and emergency reserves fund, an ambitious challenge to Western-run multilaterals that have shaped global finances since the end of World War Two.
Brazil, China, India, Russia and South Africa on Tuesday will sign off on the new institutions after two years of tough negotiations, a major step for the diverse group known more for its anti-Western rhetoric than coordinated action.
The BRICS will pool an initial $50 billion in the bank, with each country contributing an equal amount, and seek to gain international clout by offering developing nations alternative financing to the World Bank and International Monetary Fund, long dominated by the United States and Europe.
"This is symbolically important. It signals dissatisfaction of the BRICS countries with their position on the global economic stage," said Charles Collyns, global economist with the Institute of International Finance, which represents the world's major private banks and financial institutions.
"The fact that they are able to get together and agree on setting up these institutions is an important symbol of their rising importance," Collyns said.
The bank will be called the New Development Bank, not the BRICS bank, which leaves the door open for other emerging nations such as Turkey, Mexico, Indonesia and Nigeria to join as partners at a later date.
Many of the bank's rules of operations, such as future investment in private projects, will be decided after its formal creation at next week's summit in the Brazilian city of Fortaleza. The bank is expected to make its first loan in 2016.